Gap's shares plummet after sales continue to slide

The company's shares fell nearly 9 percent in after-hours trading Thursday, after the clothing retailer announced March results that show its continued sales funk. It marked its 12th consecutive monthly decline for the key revenue measure.

It also warned that it was entering April with higher levels of inventory, which it said could hurt profit margins.

The ailing retailer, based in San Francisco, California, said late Thursday that its revenue at stores open at least a year fell 6 percent as all three key brands— Banana Republic, Old Navy and its namesake label — suffered sales drops. Analysts were expecting a smaller 4.3 percent decline.

By division, Gap's revenue at stores open at least a year fell 3 percent, while Banana Republic's key sales metric fell 14 percent and Old Navy saw a 6 percent drop.

The company's total sales fell 6.5 percent to $1.43 billion for the five-week period ended April 2 compared to the year-ago period.

The weak performance underscores the challenges for Gap's CEO Art Peck who assumed the helm in February 2015 and is trying to turn around the business. And Gap has struggled with management upheaval. Late last year, Stefan Larsson, Old Navy's boss who spearheaded a turnaround at the low-priced chain, left to become CEO of Ralph Lauren. Then, the creative director for the Banana Republic brand, Marissa Webb, who was hired to re-energize Banana Republic, stepped down after dismal results

Peck had told investors in February that he expected that business would perk up during the spring season. But big sales signs continue to rule. At the Banana Republic store, shoppers could get 50 percent off the first purchase and a 40 percent discount off the rest of the purchases.

Shares fell $2.49 to $25.19 in after-hours trading, after being down more than 4 percent, or $1.18 to close at $27.68 in regular trading.